THE FUTURE
IS WHAT YOU
MAKE IT
At Castrol we have always
been pioneers pushing the
boundaries of innovation and
believers in acting today to
create the technologies for a
‘frictionless tomorrow’. True to
this commitment, Castrol have
set up a new innovation unit,
Castrol innoVentures, focused
on step-out innovation and
new business development
beyond lubricants. Our
objective is to create Castrol’s
future by building businesses
beyond today’s lubricants
products. This will be achieved
by focusing on the longer term
needs of our customers and
consumers and working with
key partners to provide stepout solutions.
We have invested in
understanding more clearly
the future trends that are
impacting the world and the
sectors in which we operate.
We are astounded by the
sheer pace of change and have
summarised the key findings in
the following ‘futures’ covering
both broader ‘mega trends’
and ‘9 futures’ that are directly
related to our world.

The futures are the result of a extensive work by Castrol
innoVentures: We facilitated a number of workshops
globally with Business leaders, OEM’s and industry
experts, VCs as well as governments, civil authorities and
leading academics to further understand what the future
might look like for all of us. We received numerous, and
often conflicting perspectives. At Castrol we have taken
these view points and inputs to created the following
perspectives on that the future might look like.
We do not profess to be able to predict the future, but
hope the trends & implications put forward will serve as
rich mix of stimulus, that will allow us to develop a more
informed perspective of what the future might holds in
store.
Happy reading.
<<signature>>
Roy Williamson

02 GLOBAL
MEGA TRENDS
“Well defined and existing trends, with no specfic end
point that affect several futures. High longevity and not
reversible overnight.”

02
Global Mega Trends

HYPER
PERSONALIZATION
The â&#x20AC;&#x2DC;Era of the Consumerâ&#x20AC;&#x2122;: Hyper-personalization takes off as consumers trade privacy for
value, and more aspirational, demanding, and discerning consumers get personalized attention.
Immediacy and convenience become the norm.

02
Global Mega Trends
CHARACTERISTICS

SIGNALS FROM TODAY

IMPLICATIONS FOR TOMORROW

• Consumer demand real time, and personalized
content and experience drives mass mobile.
Want authenticity and instant gratification (e.g
Amway China)
• Ownership shifts as consumers increasing’
Don’t Want To Buy Stuff’ (fastcompany)
• By 2020 over 90% of people will exchange
their private info in return for the right value
proposition (Hyperbox)
• Degrees of Previously Unimaginable Precision
in Targeting of Addressable Populations (e,g.
locational & real time personalisation)
• High demand for customization, especially
with younger consumers who have a desire to
stand out, and greater ability to compare and
contrast products and services (e.g Nike, TOMS
shoes)
• Consumers go from active digitally to digitally
active – social influencers more important than
brands
• F-Factor: Social networks mean consumers
now lead the conversation (e.g communal
rating)

• If you can’t provide the consumer with what
she needs, where she wants and when she
wants it … with the right CONTEXT – you
become a COMMODITY!
• High involvement purchases become
hyper personalised, low involvement become
commodities (automated buying process)
• Consumers demand immediacy and
convenience
• Consumers demand access but not necessarily
ownership (only own because you want to)
• Personal data is the oil of the digital age
• Era of retail is over; era of ‘commerce
everywhere’ and ‘instant gratification’
• On- & offline must coexist: Without A Physical
Presence, the Consumer is Unable to Enjoy a
Full Emotional Connection to the Brand
• Consumers are source agnostic – brand, digital
or physical and expect seamless execution
• Curation will be important, with emphasis
on personalized products, not just “good
products”

02
Global Mega Trends

DIGITAL
EVERYWHERE
The â&#x20AC;&#x2DC;Era of the Consumerâ&#x20AC;&#x2122;: Hyper-personalization takes off as consumers trade privacy for
value, and more aspirational, demanding, and discerning consumers get personalized attention.
Immediacy and convenience become the norm.

02
Global Mega Trends
CHARACTERISTICS

SIGNALS FROM TODAY

IMPLICATIONS FOR TOMORROW

• Consumer demand real time, and personalized
content and experience drives mass mobile.
Want authenticity and instant gratification (e.g
Amway China)
• Ownership shifts as consumers increasing’
Don’t Want To Buy Stuff’ (fastcompany)
• By 2020 over 90% of people will exchange
their private info in return for the right value
proposition (Hyperbox)
• Degrees of Previously Unimaginable Precision
in Targeting of Addressable Populations (e,g.
locational & real time personalisation)
• High demand for customization, especially
with younger consumers who have a desire to
stand out, and greater ability to compare and
contrast products and services (e.g Nike, TOMS
shoes)
• Consumers go from active digitally to digitally
active – social influencers more important than
brands
• F-Factor: Social networks mean consumers
now lead the conversation (e.g communal
rating)

• If you can’t provide the consumer with what
she needs, where she wants and when she
wants it … with the right CONTEXT – you
become a COMMODITY!
• High involvement purchases become
hyper personalised, low involvement become
commodities (automated buying process)
• Consumers demand immediacy and
convenience
• Consumers demand access but not necessarily
ownership (only own because you want to)
• Personal data is the oil of the digital age
• Era of retail is over; era of ‘commerce
everywhere’ and ‘instant gratification’
• On- & offline must coexist: Without A Physical
Presence, the Consumer is Unable to Enjoy a
Full Emotional Connection to the Brand
• Consumers are source agnostic – brand, digital
or physical and expect seamless execution
• Curation will be important, with emphasis
on personalized products, not just “good
products”

02
Global Mega Trends

NETWORKS
OF TRUST
The â&#x20AC;&#x2DC;Era of the Consumerâ&#x20AC;&#x2122;: Hyper-personalization takes off as consumers trade privacy for
The age of SoLoMo: People are connected everywhere and networks, powered by digital
technologies, based on common values, activities become the new sources of knowledge leading
to democratization of information which no longer resides with chosen few, be it governments,
individuals or manufacturers/ corporations.

02
Global Mega Trends
CHARACTERISTICS

SIGNALS FROM TODAY

IMPLICATIONS FOR TOMORROW

• Facebook has over 900MM users
• Arab Spring was led & spread via social
platforms – power to enable regime change –
Egypt, Tunisia, Libya…
• Linkedin is the largest professionals community
with 160MM users
• Word of mouth is a key component of
Marketing Plans
• Role of social influencers – Lady Gaga has
10M+ twitter followers, 50MM+ facebook
likes
• Social media disasters such as Nestle Palm Oil
issue, Domino’s health code, United’s broken
Guitar
• Very dynamic space to watch - Governments
try to control Google (China) and Twitter.
• Facebook stock falls as people question its
ability to win on Mobile.

• Have a social media strategy based on the role
we want it to play (eg awareness versus driving
bonding)
• Participate in Social Media & communities
based on transparency & authenticity
• Develop digital platforms that
build engagement of brands with consumers –
mobile based platforms are a must
• Participate in the conversations rather than
trying to direct/ guide them – Listen, Engage,
Act
• Role of Influencers is becoming critical –
understand who are the key influencers in our
categories engage with them
• Winners & Losers will keep changing at a fast
pace. Constant need to monitor environment
and adapt fast.

02
Global Mega Trends

DEMOGRAPHICS
& LIFESTYLE
CHANGES
Demographic shifts are changing global landscape with people living & working
longer, urbanization happening at rapid pace in developing markets, emergence of
mega cities and creation of wealth in markets such as China, India, Indonesia. While
Europe & East Asia ages, South Asia, MEA is still young and will drive consumption of
goods and services. US demographics continue to be a source of consumption.

02
Global Mega Trends
CHARACTERISTICS

SIGNALS FROM TODAY

IMPLICATIONS FOR TOMORROW

• China is already the largest car market
• By 2020, size of urban population in
developing markets will surpass rural
populations
• In Europe retirement is at 65, with Spain &
Germany increasing to 67
• A Domino’s pizza in Birmingham became the
first to offer a total Halal menu– some cities
in Europe have 30-40% of children with
immigrant background
• Over 1BN people live in shanty towns in urban
cities
• In Japan 70% of assets including real estate
are owned by 50 year+
• Samsung introduces Jitterbug – a cell phone
for Seniors

• Develop growth strategy for markets
where the spending power will grow & future
consumers are growing up – Asia, MEA. US
continues to be source of affluent consumers
and overall consumption as 15-64 yrs pop
expected to grow 42% between 2000-2050
• Impact of urbanization on mobility needs will
have key impact on our business, specially PCO
consumption – need to identify new customers
& services
• Consumers have legacy from their home
countries – important to have global brand
footprints & have consideration for traditions
& values
• Older people will have specific needs and
this needs to be addressed specially in WE &
East Asia – they can be a source of incremental
revenue rather than being not targeted

02
Global Mega Trends

URBANIZATION
The growth of cities is expected to continue over the course of the next 20 years with
changes in lifestyle and mobility expected.

02
Global Mega Trends
CHARACTERISTICS

SIGNALS FROM TODAY

IMPLICATIONS FOR TOMORROW

• New drivetrain investments being made in
large cities to speed new tech adoption (e.g.
Electric Vehicles in China).
• Lee Kuan Yew 2012 World City Prize:
New York City. Cities raise the lifestyle and
environment bar.
• Growth in cities creates opportunities in rural
areas as well:
• The Smart Rural Community
• People are falling out of love with cars
(especially in cities). Mass transit and walking,
cycling winning.

SUSTAINABILITY
As clarity regarding both climate change and chemical impact is enhanced by Big Data,
we expect more informed consumers and a more sophisticated regulatory environment
mobility expected.

02
Global Mega Trends
CHARACTERISTICS

SIGNALS FROM TODAY

IMPLICATIONS FOR TOMORROW

• Consumers care about sustainability and are
coming to expect it in their products:
Shoppers consider product sustainability in
buying decisions
• CO2 impact re-enters the global consciousness
(with data):
• Regulatory agencies are gearing up to use Big
Data for their policy revisions.

• Choices in energy products (including fuels and
lubes) will need to demonstrate commitment
to “best current sustainability performance” as
well as product performance.
• Product choices shift as CO2 impact data
become commonplace.
• Unexpected links between chemicals
and hazards could arise from Computational
Toxicology (High Throughput Regulatory
analysis.

02 GLOBAL
MEGA TRENDS
“Well defined and existing trends, with no specfic end
point that affect several futures. High longevity and not
reversible overnight.”

03
Futures

CONNECTED
FOURTH
SPACE
Consumers expect more from the time they spend in the car and develop closer
emotional bonds as their car reflects more of them as individuals. Improved productivity
through connectedness, edutainment, voice activated technology and bio-responsive
telemetry are enablers.

03
Futures
CHARACTERISTICS

SIGNALS FROM TODAY

IMPLICATIONS FOR TOMORROW

• The industry is conservative given the large
amount of embedded capital, however, market
forces, e.g. trade routes and transportation
could force disruption
• Slow steaming is here to stay.
• Impeding emissions regulation and
sustainability are guiding today’s choices.
• Operational optimization using advanced
analytics is gaining momentum and acceptance
for ship trim and speed, hull maintenance, on-
board maintenance, etc.
• Fleet asset optimization determining which
ships to use in which way for what routes is
now
• Large tanker, container and cargo ships are the
most CO2 efficient way of transportation
today
• Triple E Class – 18,000 TEU – reality by 2013
• Transparency of cargo contents and security
has given rise to numerous security and
tracking systems available today

• New consumers double world trade, with
Africa playing a major role, including as
importer of protein / food / agriculture
• Moving of ideas, goods, and services is more
feasible and less costly than before
• Future ships will include new materials, self
loading, lube oil analysis, cargo protection, and
flexible storage
• Security – knowing will become more valuable
– what / where is it from, how is it handled,
when was it moved
• Security concerns addressed in maritime
through the use of sensors, networks, and
operations control
• Customers willing to pay more for secure,
authentic, pure
• Sustainability focus highlights ships as polluters

03
Futures

INTELLIGENT
FACTORIES
Increasing computing power, data availability and virtual design and manufacture
combined with evolution of standards and technologies like 3D printing and adaptive
machining provides for an exciting new set opportunities to help reach industry aims
of zero loss and lights out manufacturing.

03
Futures
CHARACTERISTICS

SIGNALS FROM TODAY

that converge on the holy grail of ‘lights out
manufacturing’ where interventions and
• Virtual manufacturing environment is now changes are made as needed to the processes
becoming more a reality than ever with most without human intervention.
major manufacturers either implementing or • Six-sigma and Lean has evolved to the concept
of Zero Waste. Waste being any underutilized
using today.
• Paperless manufacturing: The concept of taking resource, whether it be material, capital or
product development completely electronic human resources
is taking hold solidly today. Now, paperless
manufacturing is becoming a reality – and the
real time transparency that accompanies it.
• Adaptive and flexible manufacturing is taking
shape in 5-axis machining, real-time adaptive
tooling management, new machining &
assembly techniques such as Blue ArcTM, EDM,
adaptive robotics, nano-manufacturing, etc.
• Additive Layer Manufacturing (3D printing) is
poised to change manufacturing as we know it:
Anyone can design then have it built, creating a
democratization of design
• The advent of truly ‘rootless’ manufacturing
The +100 simultaneous material barrier (in
one print) has been broken (Jul 2012)
• Airbus has announced its concept 2050 plane,
completely 3D printed (Jul 2012)
• Major manufacturers are working today
on predictive and adaptive technologies

ON THE
MOVE
The growth and evolution of freight transport enables the creation of mega-firms in
this arena and is enabled by application of proximity and driving technologies. This
allows, for instance, commercial vehicles â&#x20AC;&#x2DC;road trainsâ&#x20AC;&#x2122; or convoy to be formed, driven
by a solo driver and the hub and spoke urban systems present opportunities in first
mile/last mile.

03
Futures
CHARACTERISTICS

SIGNALS FROM TODAY

IMPLICATIONS FOR TOMORROW

• Road trains are being trialled as a joint
venture between seven European partners
including Volvo Trucks funded by the EU under
the moniker SARTRE (Safe Road Trains for the
Environment). (Jun 2012)
• Efforts are underway in the ISO to create
a uniform standard for electronic container
security
• Several manufacturers, including American
giants General Electric and IBM, have gone
ahead to design electronic container security
systems
• Airsage provides real time traffic information
Orange Business Services Provides Global
Network to Shipping Industry Leader ZIM (May
2012)
• Logistics companies already using real
time fleet tracking and management tools.
Automation and Data-Management Tools Seen
Benefiting Fleets (Jun 2012)
• Environmental impact of home delivery
(calculated at 1/20 of typical supermarket visit
in a car)
• London buses use bar code reader on lamp
posts to map real time position of fleet

• Transparency of cargo to provide increased
security and speed of customs entry
• Widespread use of platooning on major
highways
• Development of predictive traffic tools based
on advanced pattern recognition software
• Cities will have highly developed V2I and
traffic management technologies in place
• Home delivery will become the cheapest
option as scale economies kick in and cities
favour “greener” solutions

03
Futures

DESIGNER
MATERIALS
The discovery and production of new materials will revolutionise consumer products
driving down cost, increasing energy efficiency and accessibility. Designer materials
are enablers accelerating innovation across multiple platforms. Innovations are driven
by academia, small start-up, applied and commercialised by multinationals

03
Futures
CHARACTERISTICS

SIGNALS FROM TODAY

• While 3D printing, robotics, AI, and
nanotechnology are all expected
• As a fascinating two-dimensional carbon to dramatically change the manufacturing
allotrope, graphene has triggered a ‘gold rush’ landscape over the next several years. 3D
all over the scientific research areas especially printing is becoming available to the general
public.
since the Nobel Prize for Physics in 2010
• Fuel efficiency and low carbon emission
IMPLICATIONS FOR TOMORROW
regulations are playing a major role
in raising global demand to incorporate
lightweight composites to replace metal parts • Graphene research uncovers applications in
in automotive components such as one-piece batteries, electronics, solar energy, and even
desalination
carbon fibre car wheels
• Developments in composite materials allow
• A new composite material was developed
that can not only store and discharge electrical cost effective lightweight construction of
everyday objects. Metal working is a thing of
energy but which is strong and lightweight
the past?
enough to form part of a car’s structure
• New materials allow the integration of
• Thermal control of electronic components
multiple
functionalities
which
further
reduce
e.g. in vehicles using Phase Change Materials
(PCM) is developed by PureTemp, Fraunhofer weight.
and others. Lehigh University develops a PCM • Thermal efficiency becomes the next step
in vehicle efficiency. Optimised engineering
system for storage of solar energy. Cost and
efficiency compared to water/glycol remain key solutions reduce weight while conserving
• Membranes of increasingly sophistication find energy.
• Increased selectivity and throughput make
application in desalination, municipal waste
membranes the first choice separation tool for.
water and used engine oil treatment.
• Future improvements and alternative coatings
• ANS develop a surface coating methodology
reduce the need for complex formulated
is developed which ‘… makes cars and
engine and gear box oils.
trucks more fuel efficient, makes rock drills
efficient waste stream treatments.
last longer while the application is more cost
• Will manufacturing outsourced to China over
effective than DLC…’
the past decade return to the west with the
advent of new manufacturing techniques?

03
Futures

OWNERSHIP
Vs. ACCESS
Will simple economics and convenience enabled by technology shift the balance from
ownership to access as we prefer to rent than buy?

ROAD TO
ZERO
Governments, consumers, companies all get the environment thing. The mix of
engaging the consumers, voters, and advances in technology means you can have
quality and green, without the price premium. The logistics flow reflects this as
ubiquitous connectivity, and total ecological transparency means every step of every
product is known, tracked and fed back to consumers.

03
Futures
CHARACTERISTICS

SIGNALS FROM TODAY

IMPLICATIONS FOR TOMORROW

• 80-60 rule: 80% of goods sourced within 60%
of where you live
• Factories making products are locally
located, investing in production processes
minimize waste, and building in cradle
to cradle management including design for
disassembly approaches
• Land transport at a fleet level has switched to
both optimized flow design and alternative
drive trains
• Increasing recognition of drivetrain
diversity required for on road transportation,
leading OEMs to share investment cost with
‘competitors’,
(Toyota and BMW, BMW and Mercedes, Toyota
and Ford)
• Manufacturers and logistics providers
see the cost of inaction to be
greater than implementing green
practices, as this is initially seen as source of
value and differentiation, and later
“tablestakes” to play
• Focus on efficient shipping designs and new
/ alternative energy sources: Shipping
companies are building in advanced scrubbing
systems, exploring new hull designs and using
more efficient slow shipping

• Opportunities to exploit the local manufacture
tag, from made in USA to Made just down the
road
• Eco labels on all manufactured items similar to
the labels on domestic appliances
• Differentaition offers on logistics, paying
more for slower, more environmentally friendly
options
• Power-train sources likely to be common
across vehicle ranges, differentiation will be
more difficult to achieve

03
Futures

ELECTRIFYING FUTURE
The drive train is evolving with increasing hybridization, towards full electrification,
driven by CO2 emission legislation, city emission zones and a drive to stimulate a new
industry.

03
Futures
CHARACTERISTICS

SIGNALS FROM TODAY

IMPLICATIONS FOR TOMORROW

• EU CO2 treatment of xEVs continue, driven by
New industry stimulus
• China EV Policy updated with specific EV and
PHEV targets for 2015 and 2020
• OEMs refocused from BEV to Hybridisation,
efficiencies improving
• PHEV finding uptake in US, Hybrid Sales
booming in US
• EVs increasingly used for Car sharing schemes
• More emphasize on innovation in controls for
smarter and longer life battery life
• Installation of Free charging points by majors
new to automotive e.g. retail

OUR CITY.
MY LIFE
â&#x20AC;&#x153;City statesâ&#x20AC;? provide distributed power and energy, with more localized manufacturing
and trade. Urban multi-modal (mass / personal) transportation adapts to become
seamless and sustainable. Dramatic improvements in mass transportation and smart
mobile devices drives city consumers from cars to inter-nodal transport solutions that
require new support networks.

03
Futures
CHARACTERISTICS

SIGNALS FROM TODAY

IMPLICATIONS FOR TOMORROW

EU CO2 treatment of xEVs continue, driven by
New industry stimulus
China EV Policy updated with specific EV and
PHEV targets for 2015 and 2020
OEMs refocused from BEV to Hybridisation,
efficiencies improving
PHEV finding uptake in US, Hybrid Sales
booming in US
EVs increasingly used for Car sharing schemes
More emphasize on innovation in controls for
smarter and longer life battery life
Installation of Free charging points by majors
new to automotive e.g. retail

OEMs will continue to invest and develop/launch
EV and hybrid models
EV&PHEV penetration in China likely to happen
>2015 with Chinese OEM xEV offers
Hybrid drive trains will be consolidated and
optimized before 2020
Hybrids are mainstream, PHEV could become
mainstream
Potential accelerated uptake in this specific
segment
More complexity in electric component
management
New Non conventional competitors in â&#x20AC;&#x153;fuellingâ&#x20AC;?

03
Futures

SMART
SHIPPING
Shipping companies are focussed on fuel savings, operational optimization and meeting
upcoming emissions standards with their existing assets, however, the changing world
may force the industry to change more than it has planned â&#x20AC;&#x201C; which means opportunity
for those looking to disrupt the status quo.

03
Futures
CHARACTERISTICS

SIGNALS FROM TODAY

IMPLICATIONS FOR TOMORROW

• The industry is conservative given the large
amount of embedded capital, however, market
forces, e.g. trade routes and transportation
could force disruption
• Slow steaming is here to stay.
• Impeding emissions regulation and
sustainability are guiding today’s choices.
• Operational optimization using advanced
analytics is gaining momentum and acceptance
for ship trim and speed, hull maintenance, on-
board maintenance, etc.
• Fleet asset optimization determining which
ships to use in which way for what routes is
now
• Large tanker, container and cargo ships are the
most CO2 efficient way of transportation
today
• Triple E Class – 18,000 TEU – reality by 2013
• Transparency of cargo contents and security
has given rise to numerous security and
tracking systems available today

• New consumers double world trade, with
Africa playing a major role, including as
importer of protein / food / agriculture
• Moving of ideas, goods, and services is more
feasible and less costly than before
• Future ships will include new materials, self
loading, lube oil analysis, cargo protection, and
flexible storage
• Security – knowing will become more valuable
– what / where is it from, how is it handled,
when was it moved
• Security concerns addressed in maritime
through the use of sensors, networks, and
operations control
• Customers willing to pay more for secure,
authentic, pure
• Sustainability focus highlights ships as polluters

The future is an exciting place for all of us. And the
good news is we are working towards it, today.
If you have an opinion on any of the 4 territories, or a brilliant insight or idea – or
would simply like to find out more – we’d love to hear from you.